Finally got my result back from W.S.E.T. in London. Course work send in on 12th of April, answer came yesterday. So, this is what it takes to get “Distincion” on this task.
I send a big thank you to Lars J. with help, and Christina L. for help with the las corrections.
Feel free to read about AGENTS, IMPORTERS AND DISTRIBUTORS the way I look at it.
Submitted April 12th 2011 by Frederik Kreutzer
0. List of Contents
- 1. Introduction to Intermediaries in the Wine Business
- Other intermediaries
- 2. Bodegas Primaria – Ribera del Duero
- The US Market
- The UK Market
- The Swedish Market
3. Conclusion and Personal Commentary
1. Introduction to Intermediaries in the Wine Business
Jean-Michel Valette MW has, in his “Rule #1”, stated that the main thing to remember about the wine business, is that it doesn’t exist. The background to this provocative statement is that the “wine business”, is an amalgamation of segments and not a single homogeneous industry. Along the distribution chain we have various products, price points and tiers as well as geographically dispersed markets. Each of these segments has their own competitive dynamism and game rules. In this assignment we will take a closer look at the intermediaries in the multi fragmented business.
An intermediary can be defined as an individual or a firm that links producers to other intermediaries or to the ultimate buyer/consumer. According to this definition a wine retailer will also belong to the category of intermediaries. The focus of this assigment is to look at the intermediaries in direct contact with the producers, so wine retailers are not included in the scope of this assignment. Below we will describe the tasks that various intermediaries can undertake on behalf of producers.
Intermediaries can be divided into three distinct categories:
- “Marketmakers” that takes ownership of the product.
- “Matchmakers” that receives commission on transactions.
- “Négotiants” that transforms or brands the product.
An agent in the wine business can be defined as a firm that is authorized to act on behalf of a producer and to create a legal relationship with a third party. It follows that agents do not take ownership of the wines which they market and belong to the “matchmaker” category, and they will typically be paid for their services in form of commissions. An agent can be employed by the supplier side or by the buyer side.
Agents will typically be employed by small producers with limited marketing experience and ressources. The agent can have several wine producers in his portfolio and the producers will benefit from the agent’s marketing network and not least market knowledge, when a producer enters a new export market. The agent will provide the producer with an importer that matches the producer’s needs in relation to price segment and volume. When entering a new market a producer takes the risk of being matched with an inadequate importer, if an agent is not used.
Wine importers are responsible for the transfer of wine across borders where local legislation may apply with regards to excise duty and taxes. A wine importer can be a large distributor with a chain of retail outlets attached, such as the Danish company Taster Wine A/S with their chain of 63 Skjold Burne retail outlets. At the other end of the spectrum a wine importer can also be a single retail outlet, taking home wine from a few selected small producers, using “direct import” as one of their key selling points.…